Internal Revenue Bulletin:  2008-46 

November 17, 2008 

T.D. 9426

Balanced System for Measuring Organizational and Employee Performance Within the Internal Revenue Service


DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 801

AGENCY:

Internal Revenue Service (IRS), Treasury.

ACTION:

Final Regulations.

SUMMARY:

This document contains final regulations relating to the modification of regulations governing the IRS Balanced System for Measuring Organizational and Employee Performance. These regulations affect internal operations of the IRS and the systems that the agency employs to evaluate the performance of organizations within the IRS and individuals employed by the IRS.

DATES:

Effective Date: These regulations are effective on October 14, 2008.

Applicability Date: For dates of applicability, see §801.8.

FOR FURTHER INFORMATION:

Neil Worden, (202) 927-0900.

SUPPLEMENTARY INFORMATION:

Background

On October 17, 2005, the IRS published in the Federal Register proposed regulations (REG-114444-05, 2005-2 C.B. 934) at 70 FR 60256 and final and temporary regulations (T.D. 9227, 2005-2 C.B. 924) at 70 FR 60214 amending 26 CFR part 801. One written comment was received. No public hearing was requested. This document adopts, without modification, the proposed regulations as final regulations.

Summary of Comments

The commentator suggested that modification of the regulation was not needed. The commentator further suggested that the Quantity measure “number of cases closed” should never be used to evaluate IRS employees or suggest goals. The amendment of Part 801 retains the absolute prohibition on the use of quantity data to evaluate non-supervisory employees who exercise judgment with respect to tax enforcement results. The amendment allows communicating the quantity goals of an organizational unit with employees, including quantity expectations, such as the average number of case closures needed to meet the unit’s goal. These communications must recognize that the facts and circumstances of each case will affect an employee’s actual closures, and that the employee is not being given a quota which must be met. Accordingly, the commentator’s suggestion was not adopted.

In addition, the inclusion of some outcome-neutral production data as examples of quantity measures (for example, cycle time and number or percentage of overage cases) (§801.6(c)) does not preclude an organizational unit’s use of this or other outcome-neutral production data as quality measures.

Special Analyses

It has been determined that this Treasury decision is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It also has been determined that the section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations, and because the regulation does not impose a collection of information on small entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. Pursuant to section 7805(f) of the Internal Revenue Code, the notice of proposed rulemaking preceding these regulations was submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business.

Adoption of Amendments to the Regulations

Accordingly, 26 CFR Part 801 is amended as follows:

Paragraph 1. The authority citation for Part 801 continues to read in part as follows:

Authority: 5 U.S.C. 9501 * * *

PART 801—BALANCED SYSTEM FOR MEASURING ORGANIZATIONAL AND EMPLOYEE PERFORMANCE WITHIN THE INTERNAL REVENUE SERVICE

§§801.1 through 801.7 [Removed]

Par. 2. The center heading and §§801.1, 801.2, 801.3, 801.4, 801.5, 801.6, and 801.7 are removed.

§§801.1T through 801.8T [Redesignated as §§801.1 through 801.8]

Par. 3. The center heading preceding §801.1T is removed.

Par. 4. Sections 801.1T, 801.2T, 801.3T, 801.4T, 801.5T, 801.6T, 801.7T, and 801.8T are redesignated as §§801.1, 801.2, 801.3, 801.4, 801.5, 801.6, 801.7, and 801.8 and the language “T” following the section number and “(temporary)” is removed from each section heading, respectively.

§801.1 [Amended]

Par. 5. Newly designated §801.1(a) is amended by removing the language “(Pub. L. 105-106, 112 Stat. 685, 715-716, 722)” and adding the language “(Public Law 105-106, 112 Stat. 685, 715-716, 722)” in its place.

§801.2 [Amended]

Par. 6. Newly designated §801.2 is amended by removing the language “Pub. L. 104-106, 110 Stat. 186, 679); the Government Performance and Results Act of 1993 (Pub. L. 103-62, 107 Stat. 285); and the Chief Financial Officers Act of 1990 (Pub. L. 101-576, 108 Stat. 2838)” and adding the language “(Public Law 104-106, 110 Stat. 186, 679); the Government Performance and Results Act of 1993 (Public Law 103-62, 107 Stat. 285); and the Chief Financial Officers Act of 1990 (Public Law 101-576, 108 Stat. 2838)” in its place.

§801.3 [Amended]

Par. 7. Newly designated §801.3(e)(1) and (e)(3) is amended by removing the language “§801.6T” in each location and adding the language “801.6” in its place.

§801.7 [Amended]

Par. 8. Newly designated §801.7(a) introductory text is amended by removing the language “§801.3T” and adding the language “§801.3” in its place.

Par. 9. New designated §801.8 is revised to read as follows:

§801.8 Effective/applicability dates.

The provisions of §§801.1 through 801.7 apply on or after October 17, 2005.

Linda E. Stiff,
Deputy Commissioner for
Services and Enforcement.

Approved October 7, 2008.

Eric Solomon,
Assistant Secretary of
the Treasury (Tax Policy).

Note

(Filed by the Office of the Federal Register on October 10, 2008, 8:45 a.m., and published in the issue of the Federal Register for October 14, 2008, 73 F.R. 60627)

Drafting Information

The principal author of these regulations is Karen F. Keller, Office of Associate Chief Counsel (General Legal Services). However, other personnel from the IRS participated in their development.

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